The maximum fine of 2 billion for unfair competition practices
After 12 years of implementation, Competition Law 2004 reveals many limitations, no longer appropriate with the practical development of socioeconomic of the country. As the result, on June 12th 2018, Competition Law 2018 was issued replacing Competition Law 2004.
Featured content of Competition Law 2018 is the separation of economic concentration from Anti-competitive practices. And the government now try to control the economic concentration. Economic concentration includes the following categories:
- Merger of enterprises;
- Consolidation of enterprises;
- Acquisition of enterprises;
- Joint venture between/among enterprises;
- Other categories of economic concentration as per the law.
Besides, if Competition Law 2004 just based on one and only factor being market share to determine prohibited economic concentration, the new Law regulates that the determination of economic concentration must base on the nature of the behavior which is substantial anti-competitive effects caused or probably caused by economic concentration. Assessment Factors includes: market share; competitive advantage brought about by economic concentration in the relevant market; the ability of enterprises after the economic concentration for removing or preventing other enterprises from market entry or expansion; etc
In addition, Competition Law 2018 regulates that the maximum fine for violation of economic concentration regulations shall be 05% of the total turnover of violating enterprises on the relevant market in the fiscal year preceding the year of violation. Reduce 5% compared to the last regulation.
For unfair competition practices (defined as practices of enterprises’ competition acts performed by enterprises against the principles of good faith, honesty, business norms and standards, which cause or may cause damage to the legitimate rights and interests of other enterprises), new Law provides that the maximum fine for the violation of regulations on unfair competition shall be 2.000.000.000 (2 billion VNĐ). Unlike before, Competition Law 2004 stipulated generally that unfair competition practices shall be handled in accordance with the law on handling administrative violation.
For other violations, the maximum fine shall be 200.000.000 VNĐ (2 hundred million VNĐ). Competition law 2018 will take effect on July 1st 2019, contribute to ensuring the freedom of doing business, fair competition of entities on the market and enhance the national competitiveness.
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